US factory production declined in
Feb for a 3rd consecutive month, signaling cutbacks in
manufacturing will hold back economic growth this qtr. The 0.2% decrease at manufacturers followed a 0.3% drop in Jan that was initially estimated as a gain,
according to the Federal Reserve.
Total industrial production, which also includes mines & power
plants, climbed 0.1%, propelled by a record surge in
utility use as temperatures plummeted. Delays at West Coast ports have probably disrupted
supplies, while sluggish growth in foreign markets & a rising
dollar that makes American products more expensive may be
crimping demand. US consumer spending, supported by job &
wage gains, will be needed to underpin activity at factories,
which are often considered economic bellwethers. Manufacturing, which makes up about 75% of total
production, was forecast to be little changed. January had previously
been reported as a 0.2% increase. Total industrial production was projected to rise 0.2%.
Output in Jan fell 0.3% compared with a previously
reported 0.2% increase. Capacity utilization, which measures the amount of a plant
that is in use, declined to 78.9% in Feb from 79.1%. Utility output soared 7.3%, the most
since records began in 1972 as the eastern US saw below-normal temperatures & record snowfalls in New England. Mining production, including oil drilling, fell 2.5%, the biggest decline in 4 years, after a 1.3% drop the prior month. The plunge in fuel prices that started last year has led
oil producers to curb investment
plans. The decline in manufacturing output reflected a
3% drop in production of motor vehicles & parts.
Automakers had said the work stoppage at West Coast ports, which
has now been resolved, led to a shortage of some supplies.

A
poll published Fri found 52% of Germans no longer want Greece to remain in
Europe’s common currency, up from 41% last month. The
shift is due to a view held by 80% of Germans that
Greece’s gov “isn’t behaving seriously toward its
European partners.” The hardening of German opinion is significant because the
country is the biggest contributor to Greece’s €240B
($253B) twin bailouts & the chief proponent of budget
cuts & reforms in return for aid. Tensions have been
escalating between the 2 govs since Prime Minister
Tsipras took office in Jan, promising to end an
austerity drive that he blames on Chancellor Angela Merkel. Tsipras has also stepped up calls for war reparations from
Germany for the Nazi occupation during WW II & Greek
Finance Minister Varoufakis has been locked in a war of
words with his German counterpart Wolfgang Schaeuble. Last week,
the Greek gove officially complained about Schaeuble’s
conduct, to which Schaeuble replied that the whole matter was
“absurd.” The shift in German sentiment comes as Greece, at risk of
running out of cash this month, battles with European officials
over the release of more bailout funds. Tsipras will join
European leaders Thurs for more talks. German voters’ growing umbrage may make it harder for
Merkel to sell any possible deal down the road to the German
public & Bundestag, which would have to vote on it. While Merkel’s gov says Greece doesn’t have a blank
check to do as it pleases, Germany’s official aim is to keep the
euro area together. Just 40% of Germans now say they want
Greece to remain in the euro.

Confidence among US homebuilders
unexpectedly fell in Mar to an 8-month low as prospective
buyers were in little rush to shop for properties ahead of the
busier spring selling season. The National Association of Home Builders/Wells Fargo
sentiment gauge dropped to 53 from 55 in Feb. The forecast called for a gain to 56. Sales of single-family homes declined to a 5-month low & builder optimism about the outlook failed to improve. Low mortgage rates & job creation may help
spur homebuyer interest in coming months. “Even with this slight slip, the HMI remains in positive
territory and we expect the market to improve as we enter the
spring buying season,” the NAHB said. The group’s gauge of prospective buyer traffic
declined to a 9-month low of 37 from 39 a month
earlier. The index of current single-family home sales dropped
to 58, the weakest since Oct, from 61. The measure of the 6-month sales outlook held at 59, the
lowest since Jun. Builder confidence declined in 3 of 4 regions, led
by an 11-point slump in the West. Potential buyers were slow to return to the market after
colder weather in parts of the country helped limit sales &
buyer traffic in the previous month.

The bulls have taken command today even though there is little economic news to back up stock buying. There are a few deals & hopes are still high for another Greek bailout as the month end deadline approaches. Oil is at a 6 year low & the MLP index is back to where it was at the start of 2013. All is not well in the energy markets & that spells trouble for the overall stock market.